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Iowa's focus on agriculture and food production make it a popular location for people working in the farming industry. This state is the top producer of the nation's corn, soybeans, eggs and pork. It's also one of the leading producers of the nation's beef supply. Des Moines, Cedar Rapids, Davenport, Iowa City and Sioux City are all central locations for business and industry in Iowa.

The cost of living here is much lower than the national average. One of the reasons why living in Iowa is less expensive is because of lower housing costs and attractive real estate prices. Wages in the state may be a little lower than in other more populated places in the country. Health care and grocery prices in Iowa, however, are rising at levels above the national average, making some Iowa residents start to struggle financially. Some residents of the state are using payday loans to help them make ends meet and cover all of their expenses.

If you live in Iowa and are considering taking out a payday loan, here are some things you need to know about how borrowing works.

What makes Snappy Payday Loans different?

We're working hard to restore the reputation of payday loans, cash advances and other short term lending services. We believe that all kinds of people should have access to the financial products which can help them to deal with unforeseen expenses even if they have less than exemplary credit records. Unfortunately, the reputation of payday loans in Iowa has been marred by less than reputable lenders who prey on the financially vulnerable.

If you've made the informed decision to take out a payday loan you can do so safe in the knowledge that Snappy Payday Loans can help you do so in the safest way possible. Remember we are not a payday lender. Instead we put you in touch with the right payday loans direct lenders in Iowa to suit your needs, helping you to make a well informed and zero-obligation decision that's right for you and your household.

Reasons Why People Use Payday Loans

Payday loans aren't a long-term solution to people struggling with debt. Instead, it's a short-term answer to an ages-old problem of not having enough to cover outstanding bills, such as a car payment, rent or daycare costs. If you can't stretch your dollars until your next paycheck is due, then it may be wise to turn to a payday loan lender.

Typically, a payday loan is an advance on your paycheck. Once you get paid by your employer, then you must go to the lender and satisfy your financial obligation. For most consumers, a payday loan is something they use every once in a while when money gets tight. For example, if your car breaks down and you don't have enough to cover the repair, you may turn to a payday loan. Another reason to get a payday loan out is if you had to cover a costly medical expense.

What You Need To Know About Payday Loans in Iowa

Payday loans are loosely regulated in Iowa. Unlike other states around the country, the Iowa legislature didn't attempt to pass any laws regulating this industry until other states had already paved the way. There are some rules regarding lending and borrowing for payday loans in Iowa. Here are the basic facts:

  • Maximum amount for payday loans: $500
  • Loan term length: 31 days
  • Rollovers Permitted: No
  • Fees and finance charges: For loans of $1-$100 - $15; $10 each additional $100 after
  • Finance charge on a 14-day loan of $100: $16.67
  • APR on a 14-day loan of $100: 433%
  • Maximum number of loans allowed at one time: Two
  • Collection fee: $15 INF fee

Iowa Payday Loan Regulations

The maximum loan amount for payday loans is $500 in Iowa. Borrowers can't have more than two loans outstanding at one given time. It's not permitted to have rollovers in Iowa for payday loans, which means there is no way to refinance or consolidate loans in this state.

For a typical 14-day $100 loan, the lender will add $16.67 as a finance charge. In addition to this fee, borrowers are also responsible for paying up to 433% APR when they start repaying the loan. There has been talk of reducing the max interest rate in Iowa for the payday loan industry, but it hasn't been made official yet.

Loans are made for a maximum 31 days, and if the borrower doesn't begin repayment, they may tack on collection fees. However, collection fees can't go over $15 if the borrower bounces a check or has a debit that is not processed due to insufficient funds.

In Iowa, lenders are also required to collect accurate data from borrowers, such as their name, address, phone number and other details. Payday loan contracts must be written in language that is easily comprehended. All terms of the loan must be outlined in the paperwork in order for the loan to be considered legal.

How the Loan Process Works

When you apply for payday loans through our website, the process is completely secure and confidential. Our 128-bit encrypted connection transmits your application to our partners without the risk of interception by third parties.

We pride ourselves on our simple, streamlined application process. Most people are approved if they meet the following requirements:

  • Have an active checking account in good standing
  • Are a permanent resident or citizen of the United States
  • Are age 18 or older
  • Have had a job for at least one month
  • Can supply a working phone number and email address

The Types of Lenders Available

You can get payday loans and cash advances in Iowa either online or in person. Scores of brick-and-mortar lenders operate in Iowa, and some of these lenders also operate online. You can go in person during the lender's business hours or call the lender and begin the process that way. Alternatively, you can fill out an online request form if the lender has one.

Then there are online-only companies such as Snappy Payday Loans. We offer a variety of helpful features:

  • With our quick service, most loans distributed within one business day.
  • Loans are deposited right into your bank account.
  • Lenders are often willing to work with applicants who have bad credit.
  • You only have to fill out a simple online form.

We do not loan you the money, but we use the information you submit to match you with a direct lender (assuming you qualify for a loan). The direct lenders working with us operate by Online Lenders Association best practices. This online option is convenient because you don't have to leave your home and wait in line or wait for a business to open. We process applications on secure servers 24 hours a day, seven days a week.

Consumer Protection and Iowa Payday Loans

Although Iowa is known as one of the most permissive states for the payday loan industry, there are still some rules and regulations that put consumer protection first in the state. Payday loans in Iowa are regulated by a state law called the Delayed Deposit State Licensing Act. This act sets the standard for payday loan operator procedures in the state.

The Iowa Division of Banking monitors payday loan operators. Consumers who believe that they have been a victim of a lender's fraudulent actions can file an official complaint with the agency. The agency will then investigate.

In order to operate as a payday loan operator in this state, companies must apply for a license. According to the state regulation, licenses are only granted to businesses that demonstrate an ability to act fairly and ethically. Business licenses must also be renewed every year and circumstances such as a felony conviction, bankruptcy or a criminal indictment may impact the ability to operate in the state. As of 2015, there were 175 payday loan operators in Iowa.

There have been some attempts to regulate the industry even more and apply more consumer protections. As of now, borrowers are allowed to be criminally prosecuted for not paying their loans in Iowa. Although, loan operators are not allowed to threaten prosecution. State representatives and senators have tried to add more rules to protect consumers, but their efforts have been hindered by business interests. In 2004, the maximum interest rate was actually raised from 391% to 433%.

Military borrowers do get some protection from lending practices. The 2006 Military Lending Act from the federal government does instill some regulations solely for military borrowers. This is not an Iowa initiative, but a nationwide law. Military service members must not be charged more than 36% interest for any type of payday loan. Collection and repayment can be frozen while a military member is deployed. Additionally, lenders aren't allowed to garnish their wages for repayment.

The Future of Payday Loans in Iowa

While payday loans are helpful to many consumers when they're experiencing a financial hardship, some consumer advocates want more regulations in Iowa for the industry. The federal government has stepped in to help consumers all over the country with payday lending. Starting in 2020, borrowers get a few more protections in payday loan practices. Lenders are now going to be made responsible for ensuring the borrower is financially capable of paying back the loan. Loans may be not taken out three times in a row within a few months. If attempts to collect payment with a debit account are unsuccessful two times in a row, the borrower's account may not be debited anymore after that.

One state senator in Iowa does want to take consumer protection even further and make payday loans more affordable for everyone. Senator Joe Bolkom has advocated for a much lower interest rate cap of 36% for payday loans. He argues that the people who most commonly use payday loans, such as low-income earners, are more likely to experience financial problems with interest rates that are too high. Bolkom also suggests that laws be passed to help consumers get into more affordable repayment options. Flexible payment terms and consumer education may help consumers use payday loans more effectively. Despite his advocacy, Bolkom and other state lawmakers have not introduced legislation to tackle this as of yet.

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If you want a loan as soon as possible, check out our easy online form. Start the process here, and see if you're matched to a lender. If you don't like the rates or terms proposed, you are under no obligation to accept the offer. It's a win-win situation in which you get to see whether you qualify and what the terms are like.

Kelly Stone

Kelly is a graduate of Northwestern University's Kellogg School of Management with a Master's Degree in Finance. She began her career in the short-term lending industry in 1996. Starting with one store, she grew the business to over 50 storefronts offering payday loans. As the industry started to shift online, she changed gears and started Snappy Payday Loans, allowing consumers nationwide to apply online for a payday loan. Through relationships and time, Kelly has built a large network of lenders that offer loans that Snappy utilizes today.